In their moment of financial need, many scammers are targeting the unemployed and preying on their vulnerabilities to make money, according to a recent report.
A number of consumer advocacy groups have come forward to warn jobless Americans who are seeking assistance through employment services and other groups to be wary of who they work with, as many organizations are taking advantage of the unemployed and charging for help they do not provide.
"The more unemployed people there are, the more opportunities there are to take advantage of people with promises of large profits," consumer protection expert and University of Minnesota clinical law professor Prentiss Cox told MarketWatch.
According to the professor, financial stress can also make jobless Americans feel more desperate, making it more likely that they will fall for scams in the hope that these "services" can turn their financial situation around. The Federal Trade Commission urges Americans to look for red flags from these organizations, such as an up-front payment requirement. Many legitimate services will not require payment until the services promised have been performed.
Additionally, FTC director David Vladeck told MarketWatch that some scammers request bank or credit card account information so that they may automatically deduct any corresponding service fees. Consumers are urged to avoid organizations that make this request, as they are most likely illegitimate. Further, supplying account information may lead to identity theft or result in a consumer's account being wiped out, making it difficult to pay their bills and putting them at risk for credit score damage.
"They prey on people's desperation," National Association of Consumer Advocates executive direcor Ira Rheingold told MarketWatch. "When we have such a large percentage of people unemployed, it is the perfect moment for people with questionable ethics, for people who don't have a moral center."
Unemployment is a stressful situation, but if offers seem to good to be true, they probably are. During this period, consumers are advised to continue searching for employment while doing their best to pay their bills and protect their credit scores. Credit counseling services have seen a rise in the number of Americans seeking assistance and this may be a good option for those with financial difficulties. Professionals may help job seekers create a budget that will help them meet their financial obligations and keep their credit file strong.